In 2020, Riverbend Inc. received a $200,000 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $2,100,000 before deducting the dividends-received deduction (DRD), a $40,000 NOL carryover, and a $100,000 charitable contribution. Use Exhibit 13-6. (Round your tax rates to 1 decimal place. Leave no answer blank. Enter zero if applicable.)

a. What is Riverbend’s deductible DRD assuming it owns 10 percent of Hobble Corporation?

b. Assuming the facts in part (a), what is Riverbend’s marginal tax rate on the dividend?

c. What is Riverbend’s DRD assuming it owns 60 percent of Hobble Corporation?

On December 31, 2020, Gibbs Co. acquired bonds issued by Walden Co. for $112,290. They have a face amount of $100,000, pay 12% interest, and were purchased to yield 10%. The maturity date is December 31, 2030, and interest is due every December 31. The fair value of the bonds on December 31, 2021, is $108,500. Required: (1) Complete the amortization schedule through the first interest payment on December 31, 2021. (2) Prepare the journal entry(ies) that Gibbs would make on December 31, 2021, assuming the company will sell the bonds if it needs cash at any time before December 31, 2030.

Kiyara (single) is a 50 percent shareholder of Jazz Corporation (an S Corporation). Kiyara does not do any work for Jazz Corp. Jazz Corp. reported $350,000 of business income for the year (2020). Before considering her business income allocation from Jazz Corp. and the self-employment tax deduction (if any), Kiyara’s adjusted gross income was $300,000 (all employee salary). Answer the following questions for Kiyara.

Assuming the income allocated to Kiyara is qualified business income, what is Kiyara’s deduction for qualified business income?

What is Kiyara’s additional Medicare tax liability (include all earned income)?

Week 10 Assessment

Background

Researchers are interested in determining if a new diet program is effective at helping people lose weight. In a pilot study, the researchers collect a random sample of 10 subjects and measure their weight before beginning the diet, then again after one month on the diet program.

Data

The following table summarizes the information collected:

NOTE: A positive difference means that the patient’s weight after the program was actually higher than their weight before the program.

Problems

Problem 1. (2 points) Based on an analysis of the information in the table, do you feel that this study provides convincing evidence that the diet is, on average, helping patients lose weight? Explain why or why not.

Problem 2. Weight loss occurs when the difference between ending weight and starting weight is negative. To determine if a weight loss has occurred, we could conduct a hypothesis test to see if the average difference is negative, using a 5% significance level.

1. (2 points) State the null and alternative hypotheses.
2. (2 points) Explain why the t-distribution is a better choice to use than the z-distribution in this situation.
3. (2 points) Compute the test statistic. For full credit, be sure to show your work.
4. (2 points) Compute the p-value or the critical value (depending on the method you prefer). Either way, be sure to show your work by drawing a sketch.
5. (2 points) Using either the p-value or critical value method, make a decision about the null hypothesis.
6. (1 point) Based on the results of the hypothesis test, is there convincing evidence that this diet is helping patients lose weight?

Problem 3. We now wish to construct a 98% confidence interval for the mean difference between weight after the diet and weight before the diet.

1. (1 point) What is the best point estimate for the mean difference between weight after the diet and weight before the diet?
2. (2 points) Find the margin of error. For full credit, be sure to include the margin of error formula.
3. (2 points) Construct the confidence interval and summarize the interval in words.
4. (2 points) Does the confidence interval support your conclusion from the hypothesis test in problem 2? Why or why not?

Abbotsford Tile Ltd. (ATL) is a wholesaler of high quality glass, ceramic and marble tiles. In November 2019 the owner of ATL agreed to sell the company to Barrie Tile Inc. (BTI) another tile wholesaler. Each company is owned and operated by a single individual who originally founded his company. The owner of ATL decided to sell his business because he was beginning to get too old to run the store. The owner of BTI wants to purchase ATL to expand the size of his business. The two men agreed over lunch that BTI would buy ATL for an amount equal to five times ATL’s net income before tax for the year ended December 31, 2019. The deal is to be finalized on March 1, 2020. Closure of the deal requires that BTI approve of the financial statements prepared by ATL. The two men agreed that any disputes regarding the financial statements would be settled by negotiations and, if necessary, by arbitration by an independent third party. It is now January 15, 2020. You have been called by BTI’s owner to help him understand and assess a number of transactions that are reported in ATL’s December 31, 2019 financial statements. The owner of BTI explained that he does not have much experience working with financial statements but based on his examination, along with information obtained from other sources, he is concerned about a number of transactions reported in ATL’s statements. The owner has asked you for a detailed report explaining the impact of each event on the purchase price of ATL and your assessment of each of the issues. BTI’s owner said that he would like a full explanation of the implications of each event, your evaluation of the accounting used by ATL, and your supported recommendation of the appropriate treatment for each event. Your explanations are important because they will be used in negotiations with the owner of ATL and, if necessary, presented to the arbitrator.

The owner of BTI provided you with the following information about the events that are of concern to him:

a) In November 2019 ATL received a large order for tiles from a new customer. The customer’s normal supplier was on strike and had to find an alternative supplier and so the customer came to ATL. The contract requires that the parts be delivered in early January 2020. Production of the order was completed on December 18, 2019 and was ready to ship at that time. The contract requires that the customer must receive the tiles and must inspect and accept them before the contract is finalized. ATL shipped the tiles to the customer on December 31, 2019 and recognized the revenue in the year ended December 31, 2019.

b) Net income before taxes was $625,000 for the year ended December 31, 2019.

1. Stephanie is 12 years old and often assists neighbors on weekends by babysitting their children. Stephanie reported $400 of earnings from her babysitting. Calculate the 2020 standard deduction Stephanie will claim (assume that Stephanie’s parents will claim her as a dependent).

QUESTION 9

1. Stephanie is 12 years old and often assists neighbors on weekends by babysitting their children. Stephanie reported $1,600 of earnings from her babysitting. Calculate the 2020 standard deduction Stephanie will claim (assume that Stephanie’s parents will claim her as a dependent).

QUESTION 10

1. Stephanie is 12 years old and often assists neighbors on weekends by babysitting their children. Stephanie reported $13,500 of earnings from her babysitting. Calculate the 2020 standard deduction Stephanie will claim (assume that Stephanie’s parents will claim her as a dependent).

QUESTION 11

1. Roquan is an attorney and practices as a sole proprietor. This year, Roquan had net business income of $90,000 from his law practice. Assume that Roquan pays $40,000 wages to his employees, he has $10,000 of property (unadjusted basis of equipment he purchased last year), has no capital gains or qualified dividends, and his taxable income before the deduction for qualified business income is $315,000. Calculate Roquan’s deduction for qualified business income.

QUESTION 12

1. Katie is a shareholder in Engineers One, a civil engineering company. This year, Katie’s share of net business income from Engineers One is $170,000. Assume that Katie’s allocation of wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers One’s qualified property is $150,000 (unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income, no capital gains or qualified dividends, and that her taxable income before the deduction for qualified business income is $400,000. Calculate Katie’s deduction for qualified business income.

QUESTION 13

1. Katie is a shareholder in Engineers One, a civil engineering company. This year, Katie’s share of net business income from Engineers One is $170,000. Assume that Katie’s allocation of wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers One’s qualified property is $150,000 (unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income, no capital gains or qualified dividends, and that her taxable income before the deduction for qualified business income is $140,000. Calculate Katie’s deduction for qualified business income.

A saver goes to a bond trader on 1 January and purchases a bond of face value $100,000 with time to maturity 2 years and which pays a coupon of $10,000 on 31 December on each of the two years. The current market interest rate (the average yield on the collective portfolio and thus the opportunity cost of holding the bond) is 5% per year.

a) Write the equation for the price the saver must pay for the bond in terms of its face value, the coupon payments and its yield.

b) Calculate, showing and briefly explaining your algebraic workings, the price she must pay for the bond and explain its relationship to the "par value" or the face value.

c) Calculate, showing and briefly explaining your algebraic workings, the remaining duration of the bond.

Investopedia defines, “Monetary policy and fiscal policy refer to the two most widely recognized "tools" used to influence a nation's economic activity. Monetary policy is primarily concerned with the management of interest rates and the total supply of money in circulation and is generally carried out by central banks such as the Federal Reserve. Fiscal policy is the collective term for the taxing and spending actions of governments. In the United States, the national fiscal policy is determined by the Executive and Legislative Branches.”

This task will have you explore fiscal policy.

1. How did the national debt get to be so big?
2. Is there a limit on the national debt?
3. Why can't the government just print more money to get out of debt?
4. If you had a chance to speak to legislators, what would your recommendation be?

On December 8, 1986, because of a severe business downturn, Ingram Manufacturing Company laid off 61 bargaining unit employees at plant no. 28. Then on June 12, 1987, the company subcontracted with Monroe Manufacturing Company for 49 wheels. Monroe Manufacturing Company was to fit, weld and machine the core of the wheel according to Ingram Manufacturing Company’s design. The local union representing workers at plant no. 28 has decided to file a grievance, alleging that the Company has violated the collective bargaining agreement by subcontracting work while employees are on layoff.

1. To settle this matter, the union and Ingram Manufacturing Company are deciding whether to hire a permanent arbitrator to handle this grievance and future grievances, or an ad hoc arbitrator. Evaluate the merits of each kind of arbitrator.

Pick any two leaders who have served as the public face of information/leadership during this pandemic. If you select politicians, try to select one each from the Republican and Democratic parties, or it can be anyone in a non-political capacity. Then use these people as EXAMPLES of type for the next section. While I realize this may be very subjected and perhaps controversial, please use these public figures as a conglomerate of examples and discuss why symbolic leadership needs to be balanced by other leadership perspectives in order to meet organizational (using this term to mean any collective body) needs.

Do you believe that long-lasting meaningful change will occur in our healthcare system because of this dramatic (catastrophic) catalyst? What type of leadership will it take?